Why You Need Title Insurance
When you buy a home, you want to be certain that it is safely yours.
But even the most diligent search of the public records could fail
to disclose a number of title defects such as a forged will or deed,
a title transfer by someone under age, or a married person conveying
real estate without his or her spouse. Fraudulent impersonations.
Secret marriages. Undisclosed heirs. Invalid divorces. False affidavits.
The list of potential problems that can surface goes on. Without
the protection of title insurance, you'll be in jeopardy of losing
Examples of Why You Need Title Insurance
The Walking Corpse
The homeowner was a widow with seven sons. One of her offspring,
the captain of a fishing vessel, had not been heard from for many
years. Presumed lost at sea, he was declared legally dead.
When the widow passed away, her six remaining sons inherited her
home. It was an attractive house, and they put it on the market
at a modest price to facilitate settlement of the estate.
Recognizing a bargain, the Montgomerys bought the property.
They were delighted with their new home - until the long lost sea
captain returned from the dead. It turned out the widow's missing
son had decided years ago to start a new life elsewhere. When the
captain eventually returned and found the house had been sold, he
promptly filed a claim against the Montgomerys for his rightful
share of the property.
News Travels Slowly
A lady of means placed her home in the country up for sale. Before
embarking on a cruise, she gave her lawyer power of attorney on
Weeks later, the Harper family decided to buy the country place.
Its fertile land and picturesque setting were ideal for farming.
Exercising his authority, the attorney signed the deed and sold
the property to the Harpers.
Everything appeared proper, except for one hitch: The woman died
in a distant part of the world before the attorney signed over the
property. When the lady's heirs discovered that the land had been
sold after her death, they claimed the deed was invalid and demanded
their right to the property.
The Refined Forger
The Carters were charmed by the elderly lady. Impeccably mannered,
she explained that her country home had been vacant for some time,
so she was letting it go at an irresistible price.
The Carters leaped at the offer, only to find out later they were
unwitting victims of a classic forgery caper.
More cunning than charming, the old woman had learned that the
real owners of the country home were living in Europe. She forged
a deed to the property and had it recorded in her own name. Her
low asking price assured a quick sale.
By the time the Carters were made aware of the scam, the little
old lady was long gone.
John's Other Wife
John and Maxine were an ideal couple: pleasant, personable, respected
among their peers. They made quite an impression on Mr. and Mrs.
Denton, who purchased their home.
The Dentons were less impressed, however, when they heard from
John's real wife.
It seems that Maxine wasn't John's wife but his mistress, which
meant that the deed of ownership she signed was invalid. The Dentons
did eventually meet John's legitimate wife - in a court of law when
she claimed her legal right to the property.
How Title Insurance Protects
Are homeowners helpless against these and other pitfalls?
Absolutely not. You can safeguard your real estate investment against
these and other "horrors" with an owner's title insurance policy
from one of our Underwriters.
First, a service known as a title search describes - as well as
possible- the condition and quality of the title to the land you
are buying. Then, your title insurance protects you against mistakes
or threats that might otherwise result in financial loss to you
- including those hidden, unknown items.
Your title insurance protection is a permanent assurance that your
ownership and use will be defended promptly against claims at no
cost to you, whether the claim is valid or not.
Who Title Insurance Protects
There are two basic types of title insurance protection - one for
the mortgage lender and one for the homeowner or real estate investor.
If a mortgage is to be placed on your new home, the mortgage lender
will probably require that you purchase title insurance to protect
the institution's position as a holder of a mortgage loan. But this
mortgagee's title insurance policy doesn't protect you, the homeowner.
You need an owner's title insurance policy to protect your investment.
You pay only once. There are no renewal premiums, and there is
no expiration date on the policy. Yet the protection lasts as long
as you, or your heirs, retain an interest in the property.
A Small Cost for Years of Protection
The real estate you own represents stability, permanence and the
hope of the future. Don't take a chance and let your property be
taken from you because of a flaw in the title. It makes good sense,
for the relatively small amount it costs, to protect yourself with
Disclaimer: The information provided on these pages is
for general use, and is not intended to take the place of legal
advice. For specific legal questions, please contact an attorney.
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